Trump blocks Qualcomm takeover by Broadcom 'to protect national security'

Ahead of what would have been the largest tech takeover ever, Qualcomm's shareholders were set to vote on 6 March to replace six directors with candidates from Broadcom as part of the hostile $170bn takeover of the chip designer.

Broadcom was informed on 4 March that Qualcomm had filed a request with the Committee on Foreign Investment in the US to investigate if the takeover might endanger national security, the company said in a statement.

Overnight, Trump signed the blocking order which also bans the Broadcom candidates for the new Qualcomm's director’s board seats so the acquisition wouldn't be authorised by them since it was rejected twice by Qualcomm directors before.

This relatively unusual presidential move, which it has only happened three times in the past 25 years, has already been used 10 times by the Trump administration, although this is the first to avoid risks that could endanger national security.

The order said “there is credible proof that leads to believe that if Broadcom Limited, an anonymous society under Singapore law, holds control over Qualcomm Incorporated it could introduce measures that threaten to harm US national security”.

"The proposed absorption of Qualcomm is prohibited, and any merger, acquisition or equivalent absorption in the fund, whether direct or indirect, is also prohibited," Trump warned.

Analysts also speculated that the deal was nixed as the White House fears China would pull ahead in 5G if Broadcom emphasised short-term profits over research & development at Qualcomm.